Consensus on global financial reforms dissolving amid economic realities

Almost two years after global leaders came together to reach an agreement on reform measures designed to produce a fairer banking system, they seem to have reached a fork – or many forks – in the road.

Proposals put forward in individual nations are competing against one another as the initial consensus on bank capital standards dissolving.

Simon Gleeson of the British-based firm of Clifford Chance tells the Financial Times that “it demonstrates is that we need a greater degree of international co-ordination than we actually have.”

While there are larger and smaller disagreements, the controversy over the Volcker rule reflects the difficulty in maintaining harmony on reform.

Officials in Tokyo, London and Ottawa are warning that their sovereign  bond markets are under threat from Volcker and were some of the loudest voices among the 17,000-plus comments submitted to the Federal Reserve.

 

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